All about health insurance for senior citizens

Are you a senior citizen and have lost all hope of buying a regular health insurance policy? Well, if you are still under 65 years of age, you wouldn't be too old to get one some time from now.

The Insurance Regulatory and Development Authority (Irda) has asked general insurance companies to keep at least 65 years as the maximum entry age for a health insurance policy.

The present problem

Across the 16 insurers that offer health insurance policies in India, there are many choices. However, once you are over 50 years, your options get limited -- most insurers do not offer fresh covers beyond this threshold. (see Entry Age Limits).

Also, you will have to undergo some self-funded medical tests -- the older you are, the stricter the tests get. Even after this, you may not get a cover on the ground of you being medically unfit. If you are fit, there may not be a policy for your age group. In that case, you will have to opt for the especially designed senior citizens' policy (see Senior Citizens' Plans).

Senior citizens' plans

Here's a list of standalone senior citizens' health policies, the age band that they cover and the maximum sum insured they offer. To facilitate a comparison among these, we give indicative premiums assuming that the policy is for a 60-year-old with a sum insured of Rs 1 lakh (Rs 100,000).

Insurance Policy

Entry Age (yrs)

Max. Sum Insured (Rs lakh)

Annual Premium (Rs)

Bajaj Allianz General Insurance Silver Health

46-70

5

5,736

Oriental Insurance Hope

No upper limit

5

4,500

National Insurance Varistha Mediclaim

60-80

1

4,180

Star Health and Allied Insurance Senior Citizen Red Carpet

60-69

2

5,000

IRDA's solution

The regulator aims at addressing all such problems. No insurer will be able to refuse an older persom a cover or load him with extra premium without giving a valid reason for doing so. "Such reasons should stand the scrutiny of reasonableness and fairness," Irda has said.

Important as it may be, the health insurance market is arbitrary at present. For example, while some insurers reimburse the cost of medical tests to be undergone by a customer above the age of 45 years, others don't, and some others reimburse only part of it.

Beginning July 1, all insurers will have to reimburse 50 per cent of the cost of tests if they agree to cover the customer after medical examination.

At the time of refiling their products with Irda or launching new ones, general insurers will have to include these clauses in their policies.

Says Sanjay Datta, head (health insurance), ICICI Lombard General Insurance: "The sector is heading towards more transparency and consistency. With the entry age being extended to 65 years, customers would have greater flexibility in choosing a plan and also since now disclosures are explained upfront, an insured would know what's in stock for him."

The future problem

Cross-subsidisation: Some insurers feel that the move could lead to cross-subsidisation and a subsequent increase in the premium for younger people.

Says Sreeraj Deshpande, head (underwriting), Bajaj Allianz General Insurance: "We have a separate policy for senior citizens as they comprise a different risk pool. Cross-subsidisation may be a natural fallout of combining two risk pools -- that of senior citizens and younger people. To compensate the risk associated with senior citizens, younger people may have to shell out a little extra."

Senior citizens' policies were introduced keeping cross-subsidisation in mind. These policies have a lower sum insured and greater premium and are, therefore, self-sustainable. These policies also considered other needs of senior citizens.

For example, Star Health and Allied Insurance Senior Citizen Red Carpet policy offers to insure people in the age group of 60-69 years without a medical test. It also covers pre-existing diseases right from the first year.

National Insurance's Varistha Mediclaim, too, mandates no medical tests, gives no-claim benefits and includes pre-existing diseases after one claim-free year.

However, while Senior Citizen Red Carpet gives a sum insured of up to Rs 2 lakh, Varistha Mediclaim offers a maximum sum insured of only Rs 1 lakh.

Medical reimbursement: The fact that the insurer will now have to reimburse at least 50 per cent of costs of medical tests may also lead to a hike in premiums.

Entry age limits

The insurance regulator has mandated that the maximum entry age for a standard health insurance policy offered by general insurers should be at least 65 years. Here's what general insurers offer at present.

Insurer

Max. Entry Age (yrs)

Oriental Insurance

No limit

New India Assurance

80

Reliance General Insurance

80

Star Health and Allied Insurance

80

IFFCO Tokio General Insurance

70

Cholamandalam General Insurance

65*

ICICI Lombard General Insurance

60

Tata AIG General Insurance

60

Apollo DKV

60

National Insurance

59

Bajaj Allianz General Insurance

55

HDFC Ergo General Insurance

55

Universal Sompo

55

Royal Sundaram General Insurance

50*

United India Insurance

50

*For dependant parents

Mixed reforms

The reforms process seems to be rolling. Earlier this year, Irda had asked insurers to spell out renewal norms clearly to avoid any ambiguity. Says Antony Jacob, CEO, Apollo DKV Insurance: "The proposed changes will surely have a pricing implication. We will need to see it in conjunction with Irda's circular on renewals."

However, general insurers are complaining. They say that the new guidelines do not propose anything for life insurers, which have entered the health insurance business in a big way.

Says Jacob: "Life, non-life and pure health insurers should follow similar regulations when it comes to their health insurance portfolio since they operate in a similar market."

Sources say, life insurers are excused as, barring a few exceptions, they are long-term contracts and offer benefit policies like critical illness and hospital cash.

It is expected that Irda will take cognisance of such disparity soon. For you it is just a step up as the sector matures.